Gan Kok Kuan v Mahkamah Perusahaan Malaysia (WA-25-357-11/2023)

1.

FURNIWEB MANUFACTURING SDN. BHD. [No.Syarikat: 198701006262(164933-H)] ...RESPONDEN-RESPONDEN S/N W9ryhu6tLUakR8eGU/h2Sw

The Applicant’s employment with the 2nd Respondent was terminated on 31.12.2018.

He then made representations pursuant to section 20(3) of the Industrial Relations Act 1967 that he considered himself to have been dismissed without just cause and excuse.

On 7.8.2023, the Industrial Court found in his favour, and awarded the Claimant back wages for 24 months. However, the Claimant was dissatisfied with the computation of the back wages and applies to quash part of the decision of the Industrial Court in relation thereto. Salient facts

The undisputed facts in so far as they are relevant to the issue of computation of back wages are as follows:

The Applicant commenced employment with the 2nd Respondent on 5.9.2011 as its General Director for a period of 2 years until 4.9.2013;

(ii)

(iii) The Applicant’s salary package was Ringgit Malaysia and US Dollars. The Applicant was paid RM 6,884.00 by the 2nd Respondent and USD 3,012.96 by PEWA;

(iv) Sometime in November 2018, after the Applicant informed the 2nd Respondent that he was diagnosed with an illness, he was placed on medical leave until 6.12.2018;

On 4.1.2018, at a meeting with the Managing Director of the 2nd Respondent and some other senior management personnel, he was informed that his employment would cease on 31.12.2018 by effluxion of time, to correspond with the expiry of his contract with PEWA;

(vi) As a consequence of the termination, the Applicant made representations under s. 20(3) of the Industrial Relations Act 1967;

(vii) The Industrial Court found his dismissal to be without just cause and excuse and proceeded to award him compensation. Back wages amounting to RM 132,172.80 was ordered to be paid to the Applicant by the 2nd Respondent;

(viii) However, in awarding back wages, the Industrial Court did not take into account the salary of USD 3,012.96 per month that the Applicant received from PEWA; S/N W9ryhu6tLUakR8eGU/h2Sw

(ix) The Applicant now seeks to review the award in respect of the back wages which excluded the salary of USD 3,012.96 per month. Prior litigation history

The litigation that has preceded the present proceedings are material and deserves mention.

In defence to the Applicant’s claim in the Industrial Court, the 2nd Respondent contended that at all material times, the Applicant was employed with PEWA in Vietnam. His employment with PEWA was on a fixed term basis which was renewed every two years. The last extension was from 1.1.2018 to 31.12.2018.

During his employment, the Applicant had requested for part of his salary to be paid in Ringgit Malaysia for his family’s use in Malaysia. To facilitate this payment, the 2nd Respondent issued a letter of engagement to correspond with the fixed term contracts with PEWA.

The 2nd Respondent further claimed that the Applicant was never its employee, and had never worked for the 2nd Respondent. The Applicant’s employment with the 2nd Respondent depended on the continuity of his employment with PEWA. In other words, the 2nd Respondent claimed that PEWA was the real employer.

The position of the 2nd Respondent rendered it necessary for the Industrial Court to decide inter alia, whether the Applicant was a workman under the Industrial Relations Act 1967.

On 7.8.2023, the Industrial Court decided the critical question that based on the evidence before it, the Applicant was in fact the employee of the 2nd Respondent. It rejected the contention of the 2nd Respondent that PEWA was the employer. Upon examining the fixed term contracts entered into with the 2nd Respondent, it found that they were not genuine fixed term contracts. Instead, it was of the view that the Applicant was a permanent employee of the company.

Consequent upon the finding stated above, it then held that the Applicant was dismissed without just cause and excuse as it had premised its termination of the Applicant solely on the non-renewal of the Applicant’s fixed-term contract with PEWA.

The Industrial Court then proceeded to award damages premised on the monthly salary of RM 6,884.00 paid by the 2nd Respondent.

Following the decision of the Industrial Court, the 2nd Respondent filed Judicial Review proceedings vide Application for Judicial Review No: WA-25-356-11/2023 (“Suit 356”) in the Kuala Lumpur High Court to challenge the award of the Industrial Court which found for the Applicant.

Before the High Court, the 2nd Respondent again argued the Applicant was not its employee but that of PEWA’s. Hence, he was S/N W9ryhu6tLUakR8eGU/h2Sw not a workman for his claim to be adjudicated by the Industrial Court.

On 12.3.2025, Suit 356 by the 2nd Respondent was dismissed. The High Court affirmed the findings of the Industrial Court. The High Court agreed with the Industrial Court that the Applicant was employed by the 2nd Respondent and is a workman as defined in the Industrial Relations Act 1967.

At this juncture, I must add that having filed Suit 356 in another court, the present proceedings in respect of quantum to be awarded ought to have been transferred to that court for both cases to be heard together. Whilst the factual issues on liability and quantum are generally independent of the other, it may not always be so. Hence, it is expedient for the same court to hear both issues as the decision on both would depend on the same findings of fact by the Industrial Court. Grounds for review

The Applicant contends that the decision of the Industrial Court in failing to take into account his monthly salary of USD 3,012.96 from PEWA was irrational. Analysis and findings

It is trite law that irrationality has been recognized as a ground for challenge to a decision in judicial review proceedings. (See: R Rama Chandran v The Industrial Court of Malaysia & S/N W9ryhu6tLUakR8eGU/h2Sw Anor [1997] 1 MLJ 145) It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it. Irrationality is also referred to as Wednesbury unreasonableness where the decision-making authority fails to take into account relevant considerations.

The issue before this court is a very narrow one; it pertains to the exclusion of the salary of USD 3,012.96 paid by PEWA.

I am of the view that the answer to the question lies in who the Applicant’s employer was at the material time.

To reiterate, the 2nd Respondent’s position in the Industrial Court was that it was not the employer. Instead, it argued that the Applicant was in the employment of PEWA which is a sister company of the 2nd Respondent.

In rejecting the contention, the Industrial Court found as follows: [32] At the outset this Court finds that there is no issue as to the fact that the Claimant was indeed a workman. The question in contention is whether the Company was the Claimant’s employer. It is the findings of this Court that while based in Vietnam, the Claimant was reporting to COW-2 and from the facts and evidence showed that the Company had also exercised control over the Claimant’s employment. S/N W9ryhu6tLUakR8eGU/h2Sw Furthermore, even though the Company alleged that the Fixed Term Contracts were issued by the Company merely to pay part of the Claimant’s salary in Malaysia as requested by the Claimant, based on the express term of the fixed term contracts……..among others, the Claimant was employed by the Company to work in Vietnam and the Company also reserves the right to relocate the Claimant to a different location and to reassign him to a position that may be different from his initial appointment upon such terms and conditions as the Company deems appropriate, taking into account his skills, experience and qualification. Hence, from the evidence available before this Court, the Company regarded the Claimant for all purposes as an employee of the Company.

The Industrial Court therefore made a specific finding that the actual employer was the 2nd Respondent and not PEWA as claimed. The High Court in Suit 356 held that there was documentary evidence which further supported the finding of the Industrial Court.

The Industrial Court found that the 2 contracts namely with PEWA and the 2nd Respondent were exactly the same. In addition, it was also signed by the same signatory.

In this regard, I would refer to the High Court’s decision in Suit 356. The High Court considered the findings of fact made by the Industrial Court and stated as follows:

In the instant case, the claimant was employed as a workman according to the contract of employment. He was stationed in Vietnam instead of Malaysia in a company i.e Premier Estate [PEWA] which was controlled by the company. The peculiar position of the claimant saw two sets of fixed-term contracts of employment entered between the claimant: one with Premier Estate [PEWA] and the other with the company. There were separate salaries. One paid in Vietnam and the other paid in Malaysia. Of importance is the fact that both sets of contracts were signed by COW-2.

Thus the reason why the claimant did not work in Malaysia is explained. The contract of employment with the company provided that the claimant was to carry out the work as ‘General Director’ in Premier Estate [PEWA], based in the sister company in Vietnam, i.e Premier Estate.

The High Court found that it was clear the Applicant’s contract with the 2nd Respondent required him to be based in PEWA. In my view, it was another way of saying that being based in PEWA did not make PEWA the Applicant’s employer. His condition of service with the 2nd Respondent expressly stipulated where he was to be stationed.

Of significance is that the 2nd Respondent never contended and neither did Industrial Court find that the Applicant was in the employment of both. To my mind, having decided the question of the actual employer, there is only one conclusion to be drawn; the salary paid by PEWA must be taken to be the salary of the S/N W9ryhu6tLUakR8eGU/h2Sw Applicant. The responsibility to pay the salary lies with the 2nd Respondent. Any other conclusion would be inconsistent with the finding that the 2nd Respondent was his employer.

Having found the Applicant to have been wrongfully dismissed, it is irrational to then make the 2nd Respondent responsible for only the salary paid in Ringgit Malaysia. The 2nd Respondent must be responsible to pay the entire salary received by the Applicant whilst the latter was on employment in Vietnam.

To reiterate, in not taking into consideration the salary the Applicant received from PEWA, having found the 2nd Respondent to be the actual employer, the Industrial Court had clearly fallen into error. It was inconsistent with its own findings that the 2nd Respondent was the employer of the Applicant.

As such, the whole of his salary whilst he was working in Vietnam must be considered for the purposes of computation of the back wages.

Premised on the above, I am of the view that certiorari should issue to quash part of the decision of the Industrial Court with respect to the award of back wages which did not take into account the amount of USD 3,012.96.

Instead of remitting the case back to the Industrial Court for a computation of the back wages, I am of the view that this court has S/N W9ryhu6tLUakR8eGU/h2Sw jurisdiction to compute the quantum of back wages due to the Applicant.

In Sabah Forest Industries Sdn Bhd v Industrial Court Malaysia & Anor [2013] 2 MLJ 410, the Court of Appeal held, The Federal Court in Rama Chandran case has altered the scope of judicial review radically in that a court exercising judicial review has the power to review the decision of the Industrial Court on its merits, quash it by certiorari, substitute the decision of the Industrial Court with a different decision and also mould the relief, (not only to order reinstatement or payment of compensation, but in the latter case, the court can also compute the quantum of compensation).

Counsel for the Applicant has computed the amount payable at USD 72,311.00 before the deduction of 20% and this figure is to be based on the exchange rate of MYR 4.56 as at 7.8.2023. Counsel for the 2nd Respondent informed the court that she had no objections to this computation. I will accordingly order for this formula to be adopted.

Finally, I also make an order that the 2nd Respondent pay the Applicant the amount of RM 5,000.00 costs. Dated: 16th March 2026 -sgd-Alice Loke Yee Ching Judge High Court Kuala Lumpur S/N W9ryhu6tLUakR8eGU/h2Sw Counsel for Applicant: Mr. Ramesh K. Supramaniam (Mr. Julian Lee Chun Hon with him) Tetuan Ramesh K. Supramaniam Counsel for 2nd Respondent: